Chapel Hill Title and Abstract Co. v. Town of Chapel Hill, 362 N.C. 649, 669 S.E.2d 286 (2008)
Variance, Restrictive covenant
The plaintiffs owned a lot in Chapel Hill that was subject to both conventional zoning setbacks and further setbacks based on a Resource Conservation District (RCD) overlay. The town issued a permit in 2002 for a single family residence on the lot with the house location meeting the town’s 28-foot street setback. However, neighbors successfully enjoined construction at this location because it violated a 1959 private restrictive covenant that required a 50-foot street setback and set minimum lot sizes. The plaintiff acquired additional land to meet the lot size issue. However, since compliance with the restrictive covenant would push the building site back into the RCD setbacks, the plaintiff sought a zoning variance from the town. The board of adjustment denied the variance on the grounds that the hardship was created by the covenants, not the town ordinances. The trial court reversed, ruling that since the covenants were existing when the RCD provisions were adopted, it was the ordinance that effectively precluded building on the site. The court of appeals held that the board of adjustment correctly considered only the application of the ordinance in determining whether there was undue hardship to qualify for a variance.
The court held the terms of the zoning ordinance itself compelled the board of adjustment to consider the effect of the restrictive covenant in evaluation of the variance petition. The ordinance specifically directed that the board “shall consider the uses available to the owner of the entire zoning lot” in making its determination. As the restrictive covenant prevented the owner from constructing a home outside the RCD, the owner had no reasonable use of the property outside the RCD and the board must consider that in determination of the “uses available” to the owner. The court thus remanded with instructions that the variance be issued. A concurring opinion contended the RCD restriction would, absent the variance being granted, constitute a taking.